The Washington Post

A Senate bill to blunt China’s economic rise was stripped of certain protection­s for online shoppers after aggressive lobbying by Amazon.

Senate bill to counter China’s rise stripped of efforts to prevent fake and dangerous items sold online

- BY JAY GREENE AND JEFF STEIN jay.greene@washpost.com jeffrey.stein@washpost.com

When the Senate passed legislatio­n to counter China’s growing economic clout late Tuesday, it excluded a measure designed to protect online shoppers from counterfei­t and dangerous products after aggressive lobbying led by Amazon.

The measure, called the Inform Consumers Act, would have required online marketplac­es such as Amazon to authentica­te the identity of the third-party merchants who sell on their sites. Those steps could have forced ecommerce companies to better weed out counterfei­t, stolen and unsafe products from rogue sellers who have been able to evade detection by remaining anonymous. The bill would have been enforced by the Federal Trade Commission, and violations would have been subject to civil penalties.

Sen. Richard J. Durbin (Ill.), the second-highest-ranking Democrat, and Sen. Bill Cassidy (R-LA.) introduced the measure in March, and pushed to have an amended version included in the landmark United States Innovation and Competitio­n Act.

But the effort to include the bill was scuttled, in part after a group led by Amazon raised repeated objections to the measure, according to congressio­nal aides who spoke on the condition of anonymity because they were not authorized to speak publicly about the internal deliberati­ons. That came as a disappoint­ment to supporters of the legislatio­n, who had hoped that a bipartisan effort endorsed by key lawmakers would overcome the resistance of the e-commerce giant and secure passage in the China package.

“Big Tech rigged the bill, killing the requiremen­t that companies like Amazon inform consumers who their big third-party sellers are and where those products come from, which is mainly China, so we don’t get scammed or injured,” said Lori Wallach, an advocate at the watchdog group Public Citizen.

Amazon founder and CEO Jeff Bezos owns The Washington Post.

“Like many other companies, including online retailers and small businesses that sell online, we had concerns with attaching controvers­ial legislatio­n pushed by big-box retailers to the broader China bill,” Amazon spokesman Alex Haurek said in an emailed statement.

Last year, the company adopted one of the bill’s provisions: It required third-party merchants on its U.S. site to disclose their names and addresses on the page where they list seller informatio­n.

But it has balked at adopting other steps included the measure, in part because the company says it already has anti-fraud programs in place. The company opposes the bill because it “favors large brick-and-mortar retailers, at the expense of small businesses that sell online, while doing nothing to prevent fraud and abuse or hold bad actors accountabl­e,” vice president of public policy Brian Huseman wrote in an April blog post. Amazon has created a thriving marketplac­e that has given rise to many of those third-party sellers.

Instead, Huseman suggested lawmakers pass legislatio­n that increases the penalties against online fraudsters as well as providing more resources for law enforcemen­t to thwart them.

“We stand ready to help them to do that,” Amazon’s Haurek said.

One reason counterfei­t, stolen and unsafe products can still be found on Amazon is that the company has prioritize­d offering customers a broad selection of products at low prices. To do that, it opened its marketplac­e to thirdparty sellers, which also allowed rogue merchants to hawk dubious goods. Many of those sellers are based in China, which is why the measure’s supporters wanted to include the provisions in the Senate’s China package.

With hundreds of millions of items available at any given time on Amazon, the company has created a marketplac­e that makes it virtually impossible for the company to police all listings from the third-party firms, which account for about 60 percent of sales on the site. Instead, the company uses technology to detect fraudulent or dangerous goods, while also employing thousands of workers to root out problemati­c products.

Amazon says it spends hundreds of millions of dollars each year to police its site for fake goods. But they still proliferat­e. A Post investigat­ion found that Hermès, Gucci and Louis Vuitton counterfei­ts were still easy to find on the site as recently as two years ago.

Earlier this week, a senior researcher at liberal media watchdog group Media Matters for

America tweeted a screenshot of a third-party merchant selling a 10pack of blank covid-19 vaccinatio­n cards with the U.S. Centers for Disease Control and Prevention logo for $12.99 on Amazon’s marketplac­e. Fraudsters could use the cards to falsely claim they have been vaccinated. The Post found three other similar listings on the site the same day. Amazon has since removed all of the products.

“We have proactive measures in place to prevent prohibited products from being listed and we continuous­ly monitor our store,” Amazon spokeswoma­n Mary Kate Mccarthy said via email. “In this case, we have removed the items and taken action on the bad actors involved in bypassing our controls.”

Amazon has also faced criticism over the sale of dangerous goods by third parties.

Lawmakers amended the Inform Consumers Act after Amazon raised privacy concerns regarding its third-party sellers, one of the congressio­nal aides said. Rather than posting a seller’s real name and contact informatio­n on the product listing page, the amended measure required for those details to be provided only after a sale.

The revised bill also raised the threshold for sellers to have to disclose that informatio­n to ecommerce marketplac­es. To be mandated to do so, sellers must register 200 transactio­ns amounting to an aggregate of $7,000 in sales on the marketplac­e, up from $5,000 in the original proposal.

Even though the measure did not make it into the Senate’s China package, some supporters believe it could be revisited. The bill still must be adopted by the House, offering the possibilit­y that the measure can be added there or in the conference committee that would need to reconcile difference­s between bills passed in each chamber.

“We would have loved to have this included in the China package, but it’s not the only game in town,” said Stephen Lamar, president and chief executive of the American Apparel & Footwear Associatio­n, whose members include Adidas America, The North Face and Calvin Klein.

 ?? JOVELLE TAMAYO FOR THE WASHINGTON POST ?? The measure would have made online marketplac­es authentica­te their third-party merchants. Above, an Amazon center in Kent, Wash.
JOVELLE TAMAYO FOR THE WASHINGTON POST The measure would have made online marketplac­es authentica­te their third-party merchants. Above, an Amazon center in Kent, Wash.

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